To make a correct decision about limiting imports on behalf of an infant industry, the government should look at:
a. political pressure from key constituents.
b. a cost-benefit analysis measuring the present value of the likely benefits from lower production costs compared with the cost to society of higher prices in the present.
c. the value of retaining U.S. jobs versus the small cost of higher priced units.
d. the difficulty of keeping out imports from established trading partners and weighing the number of workers employed in the industry that could not easily get other jobs.
Ans: b. a cost-benefit analysis measuring the present value of the likely benefits from lower production costs compared with the cost to society of higher prices in the present.
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